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Montalvo v. State ex rel. Zoeller

Court of Appeals of Indiana

March 9, 2015

Manuel Montalvo, et. al., Appellants-Defendants,
v.
State of Indiana, ex rel. Gregory F. Zoeller, Attorney General of Indiana, Appellee-Plaintiff

Page 796

Appeal fro the Lake Superior Court. The Honorable John R. Pera, Judge. Case No. 45D10-1204-PL-31.

ATTORNEYS FOR APPELLANTS: Elizabeth M. Bartolucci, Heather Keil, O'Hagan LLC, Chicago Illinois.

ATTORNEYS FOR APPELLEE: Heather M. Crockett, Kurt D. Hammel, John Edward Frank, Office of the Indiana Attorney General, Indianapolis, Indiana.

Crone, Judge. Friedlander, J., and Kirsch, J., concur.

OPINION

Page 797

Crone, Judge.

Case Summary

[¶ 1] Hector Cavazos, Clifton Johnson, Gary McCracken, and Aldolfo Velez (" the Appellants" ) appeal the trial court's entry of partial summary judgment in favor of the State of Indiana on the State's claim to recover public funds. At all relevant times, the Appellants were members of the East Chicago Public Library Board (" the Library Board" ).[1] The State filed a complaint to recover funds alleging that, in exchange for their service on the Library Board, the Appellants received the payment of health, dental, vision, and life insurance premiums on their behalf, in violation of Indiana Code Section 36-12-2-21, which states that " [a] member of a library board shall serve without compensation." After the State filed a motion for partial summary judgment and the Appellants filed a cross-motion for summary judgment, the trial court granted the State's motion. In entering partial summary judgment in the State's favor, the trial court concluded as a matter of law that the term " compensation" includes the payment of insurance premiums, and therefore the Appellants' receipt of such compensation in exchange for their service was in violation of statutory law and constituted the misappropriation of public funds. Accordingly, the trial court entered money judgments against each of the Appellants for the reimbursement of those funds. The sole issue presented for our review is whether the trial court erred in granting the State's motion for partial summary judgment. Concluding that the State is entitled to judgment as a matter of law, we affirm the trial court's entry of partial summary judgment in favor of the State.

Facts and Procedural History

[¶ 2] The relevant material facts are undisputed. The State Board of Accounts (" the SBOA" ) conducted an audit and supplemental audit of the East Chicago Public Library for the period of January 1, 2008 to December 31, 2010.[2] During the audit period, the Appellants were members of the Library Board and each received the payment of insurance premiums for health, dental, vision, and life insurance in exchange for their service on the Library Board. The SBOA referred the audit reports to the Office of the Attorney General of Indiana. On April 18, 2011, the State filed a " Complaint to Recover Public Funds" alleging that the Appellants had misappropriated public funds. Specifically, the State asserted that the Appellants received the payment of health, dental, vision, and life insurance premiums in exchange for their service on the Library Board in violation of Indiana Code Section 36-12-2-21, which states in pertinent part that " [a] member of a library board shall serve without compensation." The Appellants filed a motion to dismiss, which was denied by the trial court.

[¶ 3] Thereafter, the State filed its motion for partial summary judgment asserting, as a matter of law, that insurance premiums are compensation, and therefore the Appellants misappropriated public funds in receiving such compensation in exchange for their service on the Library Board in violation of Indiana Code Section 36-12-2-21. The Appellants filed a cross-motion

Page 798

for summary judgment arguing, as a matter of law, that insurance premiums are not compensation and that the Appellants were not prohibited from having their insurance premiums paid in ...


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